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TMI Blog2016 (9) TMI 383X X X X Extracts X X X X X X X X Extracts X X X X ..... irming the addition of ₹ 2,81,138/- made U/S 41(1) for sundry creditors outstanding, even when the liability to pay the same is neither disputed nor written off in books by the appellant. Thus, said addition must be deleted. 2. The Ld. CIT(A) erred in law and on facts in confirming the addition of' ₹ 3.70 crores by holding the waiver of loan as revenue receipt instead of capital receipt even when- (a) the waived loan was neither a trading liability nor any expenditure had ever been claimed directly or indirectly against it; and (b) the impugned waived-off loan had arisen in the settlement of another loan and had not been taken for acquisition of any current asset. Thus, the addition so confirmed should be deleted. 2. The brief facts of the case are that the assessee had filed its return of income declaring nil income on 30.11.2006. The same was processed u/s 143(1) and the case of the assessee was selected for scrutiny. Notices u/s 143(2) were issued and the assessee, accordingly filed its submissions in respect of the questionnaire issued. 2.1 Assessee is a company engaged in the business of manufacturing, trading and job work of ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... xist and this amount of ₹ 3.70 crores is taxed as revenue receipts. 3.1 The Assessing Officer further observed as under: The assessable income is computed as under: Business loss as declared by the assessee. (-)22,17,77,552 Additions: Disallowance as per para 3 above. 28,45,070 Disallowance as per para 4 above. 5,73,791 Disallowance as per para 5 above. 2,81,138 Disallowance as per para 6 above 3,70,00,000 4,06,99,999 Total Business Income (-)18,10,77,553 Income from Capital Gains as declared 45,29,17,204 Taxable Income 27,18,39,651 Less: brought forward losses 27,18,39,651 Taxable Income N ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... e definition of income in section 2(24) is an inclusive definition. It adds several artificial categories to the concept of income but on that account the expression income does not lose its natural connotation. Anything which can properly be described as income is taxable under the Act unless of course it is exempted under one or the other provisions of the Act - Emil Webber v. CIT [1993] 200 ITR 483 (SC) 1 Kedar Narain Singh v. CIT[1938] 6 ITR 157 (All.) (ii) Items not falling under specified categories can still be income - Even if a receipt does not fall within the ambit of any of the sub-clauses in section 2(24), it may still be income if it partakes of the nature of the income. The idea behind providing inclusive definition in section 2(24) is not to limit its meaning but to widen its net. The word income is of widest amplitude, and it must be given its natural and grammatical meaning - CIT v. G.R. Karthikeyan [1993] 68 Taxman 145/201 ITR 866(SC). (iii)What one saves is also income - Even in its ordinary economic sense, the expression income includes not merely what is received or what comes in by exploiting the use of a property but also what one saves by ..... X X X X Extracts X X X X X X X X Extracts X X X X ..... on the part of the person who contributed the money to pay it - P. Krishna Menon v. CIT [1959] 35 ITR 48 (sq. (x) In Dooars Tea Ltd. v. Commr. of Agri., IT (1963) 44 ITR 6, the Supreme Court has pointed out that it is necessary to bear in mind that the word 'income' as used in the Indian IT Act, 1922, is a word of elastic import and its extent and sweep are not controlled or limited by the use of the words 'profit and gains' and they have pointed out that the diverse forms which income may assume cannot exhaustively be enumerated, and so in each case the decision of the question as to whether any particular receipt is income or not must depend upon the nature of the receipt and the true scope and effect of the relevant taxing provisions. (xi) In H.H. Maharani Shri Vijaykuverba Saheb of Morvi v. CIT, (1963) 49 ITR 594, it was held that a voluntary payment, which is made entirely without consideration and is not traceable to any source which a practical man may regard as a real source of his income but depends entirely on the whim of the donor, cannot fall in the category of 'income.' Thus voluntary and gratuitous payments which are connected with the o ..... X X X X Extracts X X X X X X X X Extracts X X X X
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